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TMI Blog2005 (1) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... wable deduction under section 37(1) of the 1961 Act before the Assessing Officer and the Commissioner of Income-tax (Appeals)? 2. Whether, on the facts and in the circumstances of the case, production incentive is an allowable expenditure Under section 37(1) of the Income-tax Act, 1961 when in the instant case the liability pertains to the previous assessment year? 3. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in treating the production incentive as allowable expenditure under section 43B of the Income-tax Act, 1961 even when the same is not statutory liability and the assessee has also claimed bonus of Rs. 15,74,735 separately?" The respondent filed a return for the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... granted relief to the assessee to the extent of Rs. 5,69,322 by recording a one line observation in the following words: "In view of the explanation of the assessee, the production incentive is allowable in the present assessment year. Therefore, the assessee gets relief of Rs. 5,69,322." The Tribunal dismissed the appeal filed by the appellant by making the following observations: "Undisputedly the amount was due to workers for the assessment year 1989-90 but paid in the year under consideration and as per the provisions of section 43B of the Act the amount could be claimed in the year when payment is actually made. All factual position makes the order of the Commissioner of Income-tax (Appeals) as justified in which no interference is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e challenged by way of appeal under article 136 of the Constitution of India. The High Courts have the power to issue writ of certiorari to quash the orders passed by a quasi-judicial authority/Tribunal. Likewise, in appeal the apex court can nullify such order/decision. This power of judicial review can be effectively exercised by the superior courts only if the order under challenge contains reasons. If such order is cryptic and devoid of reasons, the courts cannot effectively exercise the power of judicial review and we cannot countenance a situation in which the administrative authorities vested with the power to decide the rights of the parties may stultify the powers of the court simply by not recording reasons in support of their dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of AIR 1970 (Guj)): "The necessity of giving reasons flows as a necessary corollary from the rule of law which constitutes one of the basic principles of the Indian Constitutional set-up. The administrative authorities having a duty to act judicially cannot therefore decide on considerations of policy or expediency. They must decide the matter solely on the facts of the particular case, solely on the material before them and apart from any extraneous considerations by applying pre-existing legal norms to factual situations. Now the necessity of giving reasons is an important safeguard to ensure observance of the duty to act judicially. It introduces clarity, checks the introduction of extraneous or irrelevant considerations and excludes ..... X X X X Extracts X X X X X X X X Extracts X X X X
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